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News

ECB Changes Its Policy for Using Its Repo Facility

The ECB said that it no longer intends to accept ABS collateral for its repo operation if it is not backed by a liquidity facility that is worth at the minimum 20% of the deal’s nominal value.

MBA Q2 Delinquency Report Shows Worsening in Prime Sector

The MBA quarterly National Delinquency Survey reported the delinquency rate for mortgage loans on one to four unit residential properties was 6.41% of all loans outstanding as of the end of 2Q08.

Ranieri Sheds Interim CEO Post

Lewis Ranieri has stepped down as interim chief executive of the struggling Franklin Bank Corp. of Texas.

HSBC France Launches Covered-Bond Program

HSBC France, Paris, has launched an 8 billion euro ($11.6 billion) covered-bond program under French law.

SIFMA Suggests SEC Focus to Improve Ratings Process

The SIFMA cautioned against proposals to remove references to credit ratings in regulations that the SEC issued with the intention of avoiding overreliance on credit ratings and promoting independent analysis.

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Articles

DPR Business - Hazy But Not Lazy

The lazy, hazy days of summer didn't fully envelop residents of the DPR world. They weren't exactly lazy, when a handful of DPR deals either closed or ramped up in a market so grim that any cross-border closing is an event. But 'hazy' isn't so far off the mark, as players hid details as best they could. Turkiye Garanti Bankasi originated a deal where the involved parties let in some light, though pricing stayed in the dark. Barclays Capital led the Ä200 million, 10-year transaction sold entirely to the European Investment Bank (EIB), a multilateral that entered the sector of diversified payment rights only a few weeks earlier. Garanti was following in the still-fresh footsteps of Turkish peer Akbank, which closed a $393 million transaction via WestLB.

European Primary Market Remains Quiet

The August pipeline remained quiet, but market sources said that there is some indication that investors are looking to put money to work. The problem is that, at the current spreads, it is unlikely that issuers will be tempted to veer away from the now-routine securitization and repo format that has accounted for over 90% of the issuance seen so far this year.

Central Banks Move to Adjust Liquidity Programs

Both the Bank of England (BoE) and European Central Bank (ECB) board members said last week that they are looking at possible new restrictions on the liquidity facilities they currently have on offer. The changes will address concerns over the potential for excessive usage of securitized debt for ECB collateral as well as the programs' long-term sustainability.

Light Mortgage Volume Starts Off September

As September trading got underway following a long weekend, mortgages got off to a shaky start. Volume started off light, but picked up quickly as Treasurys turned around at mid-morning. Flows were directed toward better selling as Treasurys sold off and then even as they recovered following strong performance gains made in the last two weeks of August. The widening did interest money managers, hedge funds, and servicers - primarily in 5.5s and 6s. Still, sellers reportedly outnumbered buyers by 3:1. Supply averaged $2 billion, mostly in 6% coupons, which was a factor in Tuesday's weakness given the lack of buyers. Spreads ended wider to the curve by seven and six ticks in 5s and 5.5s, and by five and four ticks in 6s and 6.5s. Versus swaps, spreads ranged from four ticks wider in 5s to two ticks weaker in 6.5s.

MEFA Launches Student Loan Deal

The Massachusetts Educational Financing Authority (MEFA) is issuing $400 million in education loan revenue bonds; it is the first private student loan securitization of the year from the state authority. The deal hits the market as private student lenders have encountered issues shoring up capital. However, state authorities have also faced funding difficulties as a result of the credit crunch.

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